The recent Institute of Medicine (IOM) report, entitled "Unequal Treatment: Confronting Racial and Ethnic Disparities in Healthcare", documents racial and ethnic disparities in healthcare. Although the IOM report focuses on disparities and not on discrimination in healthcare, the authors are careful to neither attribute disparities solely to discrimination, nor to rule it out as a possible cause of disparities. This application will focus on empirically testing for the presence of discrimination, towards a better understanding of the role this factor may play in unequal treatment. This application seeks to adapt conceptual models from labor economics to study discrimination in healthcare. The specific aims and research hypotheses attempt to identify taste-based discrimination in healthcare markets, and to assess the impact of statistical discrimination on processes of care. As Balsa and McGuire (2001) explain, taste-based discrimination implies the physician discriminates solely out of his or her pleasure or a desire not to associate with someone from another race or ethnicity. In contrast, statistical discrimination implies that the physician, in interacting with the patient, does so in a much more inefficient manner with the minority patient, resulting in a greater likelihood of poor match of treatment to need for minority patients. While any claim of discrimination in healthcare will be controversial, this application will take careful steps to identify market factors associated with discrimination in healthcare markets, discrimination in healthcare, and how discrimination may affect the process of care. This application also identifies a number of analyses to eliminate possible alternative or competing hypotheses. [unreadable] [unreadable]